The Financial Action Task Force ("FATF") outlined the findings from recent anti-money laundering / countering the financing of terrorism ("AML/CFT") country specific evaluation reports, and warned of risks associated with stablecoins.

During a FATF Plenary meeting, the agency stated that stablecoins and their service providers (e.g., Libra and Facebook) could significantly impact the "virtual asset ecosystem" due to AML/CFT risks. The FATF clarified that such emerging assets and their service providers will be subject to FATF standards and classified either as (i) virtual assets and virtual asset providers, or (ii) traditional financial assets and service providers. The FATF noted that it will (i) assess the progress that countries have made in meeting recommended AML/CFT standards concerning virtual assets and (ii) monitor the characteristics and risks of virtual assets. The FATF also intends to provide draft guidance on the "use, reliability and independence of digital identification systems."

With regard to other AML/CFT matters, the FATF:

  • reimposed several countermeasures against Iran in response to its failure to implement sufficient AML/CFT standards;
  • threatened to reimpose all previously lifted countermeasures if Iran does not enact the Palermo and Terrorist Financing Conventions before February 2020;
  • adopted the 11th nonpublic update on the financing of ISIL/Daesh, Al-Qaeda and affiliated groups;
  • urged all countries to apply countermeasures to North Korea in response to risks it poses to the international financial system through continuing money laundering, terrorist financing and weapons of mass destruction proliferation;
  • reported that Russia and Turkey have adequate AML/CFT systems, but additional work is still necessary; and
  • updated its list of jurisdictions with AML/CFT deficiencies to include the Bahamas, Botswana, Cambodia, Ghana, Iceland, Mongolia, Pakistan, Panama, Syria, Trinidad and Tobago, Yemen and Zimbabwe (removing Ethiopia, Sri Lanka and Tunisia).

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